The present economic crisis has forced governments across the globe to resort not only to sharp monetary easing but also to unprecedented fiscal relaxation. Should Hong Kong follow the same route with its budget? And, if so, what will become of the stipulations in the Basic Law, and the government's own rules of thumb, concerning fiscal prudence?

Looking further ahead, what are the implications for the budget of an ageing population and the pressure for higher levels of welfare spending? How urgent is it to take pre-emptive action? Or can we rely on a growing economy to provide the means to meet the actual needs when they arise? There are related questions about the government's need to maintain financial reserves on the scale currently held, the case for broadening the tax base, and reforms to policies in such fields as land sales and public housing.

These issues are the subject of a research project sponsored by the Civic Exchange which is an independent Hong Kong-based public policy think tank, and assisted by HKU's Institute of Economics and Business Strategy. The project has been led by Tony Latter, with supporting papers by Leo Goodstadt and Roger Nissim.

All three authors are well known for their research work, books and articles in their respective specialist fields. Tony Latter is a senior research fellow of the HIEBS; he was previously deputy chief executive of the HK Monetary Authority and a visiting professor at HKU. Leo Goodstadt, a former head of the government's central policy unit, is now attached to HKU's Centre of Asian Studies. Roger Nissim, at one time government land agent, is adjunct professor at HKU, a founding director of the Heritage Hong Kong Foundation, and consultant to Sun Hung Kai Properties Ltd.